Waterstone Financial (WSBF) AI Stock Analysis

• Market Cap: $343.48M
• Dividend Yield: 3.59%
• Average Volume (3M): 44.40K
• Price to Earnings (P/E): 12.6
• Beta (1Y): 0.60
• Revenue Growth: -0.09%
• EPS Growth: 83.67%
• Country: US
• Employees: 600
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.44
• Shares Outstanding: 18,456,919
• 10 Day Avg. Volume: 62,806
• 30 Day Avg. Volume: 44,399
• PEG Ratio: 0.12
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 1.25
• P/FCF Ratio: 5.31
• Enterprise Value/Market Cap: 2.00
• Enterprise Value/Revenue: 3.52
• Enterprise Value/Gross Profit: 5.12
• Enterprise Value/Ebitda: 21.42
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $19.50 ▲(14.57% Upside)

Waterstone Financial's overall score is driven by strong technical momentum and a reasonable valuation, despite mixed financial performance. The company's profitability margins are strong, but significant revenue and cash flow declines pose risks. The stock's positive technical indicators and attractive dividend yield support its score.

Positive Factors

Profitability Margins

Sustained high margins indicate effective expense control and pricing power in core banking operations. This margin cushion supports earnings stability across business cycles and provides capacity to fund strategic initiatives, dividends or loan loss provisions over the medium term.

Cash Conversion Quality

Near-one-to-one conversion of net income into free cash flow suggests earnings are largely cash-backed, strengthening operational liquidity. This durable cash conversion underpins capacity to service debt, maintain distributions, and invest in loan growth without reliance on volatile external funding.

Community Banking Franchise

A focused community banking model drives stable deposit funding, deeper customer relationships and cross-sell opportunities across lending and fee products. These structural attributes support recurring revenue and customer retention, strengthening long-term competitive positioning in regional markets.

Negative Factors

Revenue Decline

A pronounced, sustained drop in revenue materially reduces operating scale and limits the firm’s ability to invest in growth or absorb credit cycles. Persistent top-line erosion undermines long-term margin sustainability and weakens competitive reach in targeted markets absent clear recovery drivers.

Free Cash Flow Weakness

A sharp fall in free cash flow growth constrains the company’s financial flexibility to fund loan originations, branch/activity investments, or shareholder returns. Over months this pressure can force tougher capital decisions, increase reliance on external funding, and limit strategic options.

Elevated Leverage

Relatively high leverage increases sensitivity to interest costs and credit stress, reducing resilience to adverse revenue or macro shocks. Over the medium term, elevated debt levels can constrain capital allocation, elevate funding risk and limit the bank’s ability to pursue growth or absorb loan losses.

Waterstone Financial Business Overview & Revenue Model

Company Description

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. The company also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. It operates 14 full-service banking offices, 1 drive-through office, and 14 automated teller machines located in Milwaukee, Washington, and Waukesha Counties, Wisconsin. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. Waterstone Financial, Inc. was founded in 1921 and is based in Wauwatosa, Wisconsin.

How the Company Makes Money

Waterstone Financial generates revenue primarily through interest income from loans and mortgages, as well as fees from various banking services. The company earns interest by lending funds to customers at higher rates than it pays on deposits. Additionally, WSBF collects fees for account maintenance, transaction services, and other banking products. The company may also engage in investment activities and earn income from its investment portfolio. Strategic partnerships with other financial institutions and community organizations can further enhance its service offerings and customer base, contributing to overall revenue growth.

Waterstone Financial Financial Statement Overview

Summary

Waterstone Financial shows strong profitability margins but faces significant revenue and cash flow declines, raising concerns about growth and sustainability. The balance sheet indicates moderate leverage, but the high debt-to-equity ratio suggests potential risks if revenue trends do not improve.

Income Statement

Waterstone Financial's income statement shows a mixed performance. The TTM data indicates a significant revenue decline of 31.4%, which is concerning. However, the company maintains a healthy net profit margin of 17.9% and an EBIT margin of 22.2%, suggesting strong cost management. Historical data shows fluctuating revenue growth, with a notable decline in recent years, impacting overall stability.

Balance Sheet

The balance sheet reflects moderate financial stability with a debt-to-equity ratio of 1.36, indicating a relatively high leverage. The return on equity is modest at 7.0%, suggesting average profitability for shareholders. The equity ratio is not provided, but the company's leverage and equity levels suggest a balanced yet cautious financial position.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth of 48.1% in the TTM period. The free cash flow to net income ratio is strong at 98.9%, indicating efficient cash conversion. However, the operating cash flow to net income ratio is not available, limiting a full assessment of operational cash efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	194.87M	199.38M	176.97M	171.06M	268.47M	317.86M
Gross Profit	134.15M	132.55M	127.32M	156.80M	258.09M	286.53M
EBITDA	32.05M	26.48M	14.33M	28.51M	98.16M	113.72M
Net Income	23.90M	18.69M	9.38M	19.49M	70.79M	81.14M
Balance Sheet
Total Assets	2.27B	2.21B	2.21B	2.03B	2.22B	2.18B
Cash, Cash Equivalents and Short-Term Investments	216.67M	191.24M	235.84M	232.55M	541.76M	235.54M
Total Debt	469.06M	446.52M	466.05M	386.78M	477.13M	508.07M
Total Liabilities	1.92B	1.87B	1.87B	1.66B	1.78B	1.77B
Stockholders Equity	345.50M	339.13M	344.06M	370.49M	432.77M	413.12M
Cash Flow
Free Cash Flow	43.47M	46.96M	-28.28M	205.96M	141.23M	-94.81M
Operating Cash Flow	44.44M	48.06M	-27.58M	206.66M	142.01M	-93.58M
Investing Cash Flow	-38.30M	-23.96M	-159.22M	-335.74M	160.06M	37.19M
Financing Cash Flow	6.22M	-20.76M	176.58M	-201.00M	-20.12M	76.86M

Waterstone Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSBF, the sentiment is Positive. The current price of 17.02 is below the 20-day moving average (MA) of 17.66, above the 50-day MA of 16.81, and above the 200-day MA of 14.55, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 65.15 is Neutral, neither overbought nor oversold. The STOCH value of 88.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSBF.

Waterstone Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FNLC	77 Outperform	$326.71M	9.49	11.86%	5.24%	10.46%	18.70%
FSBW	75 Outperform	$319.31M	9.90	10.77%	3.17%	4.43%	-12.94%
PLBC	73 Outperform	$365.93M	11.59	12.34%	2.63%	11.98%	-10.12%
PCB	72 Outperform	$336.27M	9.14	9.38%	3.57%	10.93%	42.68%
CZFS	71 Outperform	$324.91M	8.87	10.88%	3.38%	2.16%	24.43%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WSBF	63 Neutral	$343.48M	12.57	6.95%	3.59%	-0.09%	83.67%